Public to Weigh In on Sales Tax

May 13, 2013

WHEELING - On Tuesday, Wheeling residents can let City Council know what they think of Mayor Andy McKenzie's plan to raise an estimated $1.4 million per year for infrastructure projects and WesBanco Arena upgrades by imposing a 0.5-percent sales tax on most goods and services.

A special noon council meeting will open with a public hearing, followed by the first reading of legislation sending the mayor's plan to the West Virginia Municipal Home Rule Board for approval.

The sales tax would not apply to the sale of cars, gasoline or prepared foods. The proposal, announced last month, would also reduce the business and occupation tax on retail establishments by almost 26 percent and eliminate it entirely on manufacturing.

The new retail B&O rate would decrease to 29 cents per $100 of revenue from the current rate of 39 cents per $100.

Sales tax collections are expected to exceed the corresponding reduction in B&O revenue by about $1.4 million, which McKenzie said will provide more money to pave streets, repair bridges and comply with tightening stormwater management regulations. About half the money would go toward improvements at the arena, including facade repair, lobby renovation, new seats and possible expansion of convention space.

McKenzie believes in addition to raising additional revenue, the move will provide an incentive for development while still keeping Wheeling competitive with nearby counties in Ohio and Allegheny County in Pennsylvania, where the sales tax rates are 7 percent.

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Wheeling City Council will meet at noon Tuesday on the first floor of the City-County Building at 1500 Chapline St.

The proposal is patterned after similar legislation in Charleston, where City Council passed its 0.5-percent sales tax last week. Last year, Huntington also used its home rule powers to enact a municipal sales tax of 1 percent.

Council is expected to vote on whether to ask the home rule board for permission to impose the sales tax at its regular meeting at 5:30 p.m. May 21. If the board gives the city the green light, council would need to approve another ordinance actually enacting the sales tax, which would require another public hearing.

About a week after city officials announced the sales tax proposal, West Virginia legislators passed a bill that would allow the state Tax Department - which collects municipal sales taxes - to keep up to 5 percent of revenue generated by those taxes to offset the cost of processing them. The state already had been retaining a little more than 1 percent of Huntington's sales tax revenue, but Tax Department officials said that's not enough to reimburse them fully for the additional work.

McKenzie said Wheeling's proposal was crafted with the expectation the Tax Department would exact some sort of price, and the bill doesn't affect the city's plans. He doesn't believe state officials ultimately will charge the full 5 percent.

Council members also plan to meet in a closed-door executive session to discuss personnel matters.